Update on standard setting - and the failure of the new system

February 7, 2018

Joint standards between NZ and Australia are the norm with some exceptions for NZ specific situations or when international standards are used directly. Standards Australia (SA) holds nearly all the secretariats that monitor and develop standards. NZ has two secretariats in electrical safety. SA require an upfront NZ $ contribution where deliberations on updating joint standards are involved. The cost of this process looks like around $NZ 30,000 - $NZ 50,000. This is a new arrangement that SA requested and negotiated when the new Standards NZ (SNZ) was created in 2015. If this is not forthcoming SA plan to dejoint the standard. Government has made it clear in memos to Worksafe NZ for example they have no intention of contributing these costs – it is up to industry to pay.

This user pays approach has been introduced with some suddenness and there has been little consideration on how industry and consumers might deal with this situation, how to fund future standards development, and how to prioritise effort. In fact it is not clear how it came about, though there is a suspicion that SA wasn’t overly impressed with the way NZ was going about its restructuring of standard setting processes.

The outcome is that the number of dejointed standards looks like it might increase quickly, leaving the old jointed standard as the NZ standard. NZ then becomes progressively disconnected from international standards, which has long term negative impacts on both consumers, and manufacturers and suppliers. The real problem arises in sectors where the regulators is not collecting levy revenues which have traditionally contributed to standards development. For example in electricity and gas, Worksafe normally contributes fully to these SA standard development processes.

Three recent examples illustrate the process emerging – the short time frames, the clear intention of MBIE Standards to offer no financial support, and the expectation in MBIE that a few industry organisations will pick up the tab.

Harness standards have wide reach for example the electricity, arboriculturists, recreation and scaffolding industry to pick a few. The SA required without warning $40,000 for NZ participation in the upgrade of the two codes involved. The EEA offered $2,500, but was alone. The AS finally relented and have issued it as a joint standard but without NZ participation of any significance.

The review of water microbiology standards is following the same pattern. At short notice, MBIE Standards advised that NZ involvement required WNZ and the CRI ESR to pay $28,000. Both declined.

MBIE Standards asked for $80k to cover the costs of the redraft of a 20 page standard (Concrete Production NZS 3104) which Concrete NZ were going to redraft themselves in its entirety.

The pragmatic view is that though the system is still unsatisfactory (standard development and management is now wholly run by a small unit in MBIE), the real problem is that there is a lack of government support for standard development – that asking industry bodies to fund development is unfair as it ignores the public good component of the standard development. (NZ is the only OECD country that operates like this.)

In recent discussions with industry, MBIE Standards have conceded that they find it difficult to prioritise standard development, and they have no technical capability to know which standards are important and which SA development programmes should be supported. Industry has responded that it is willing to assist but that a rethink by government on the public good argument in standard setting is essential.

Notwithstanding the best efforts of the MBIE staff involved, this is a system in disarray, as predicted at the time the new arrangements were forced into place against industry wishes.